Home Mortgage Interest Credit Act of 2026

Bill Number

H.R. 9555

Origin Chamber

House

Congress

119th Congress, Session 2

Status

Introduced

Latest Action

2026-06-30: Referred to the House Committee on Ways and Means.

Last Updated

2026-07-06T13:38:30Z

AI-Generated Summary

Summary of H.R. 9555: Home Mortgage Interest Credit Act of 2026

Purpose

This legislation amends the Internal Revenue Code of 1986 to create a new tax credit for interest paid on mortgages for principal residences, aimed at providing direct tax relief to qualifying homeowners.

Key Provisions

• New Tax Credit: Introduces Section 25G, allowing a credit equal to the total qualified residence interest (mortgage interest on acquisition indebtedness for the taxpayer's principal residence) paid or accrued in the taxable year.
• Credit Amount and Limits:
• Maximum credit of $2,000 per taxable year for most taxpayers.
• Reduced to $1,000 for married individuals filing separately.
• Allocation required if multiple unmarried individuals share ownership and payments, with a combined cap of $2,000.
• Income-Based Phase-Out: The credit reduces by $20 for each $1,000 (or fraction thereof) that modified adjusted gross income exceeds:
• $300,000 for joint returns or surviving spouses.
• $200,000 for heads of household.
• $150,000 for other taxpayers.
• Inflation Adjustment: Dollar limits increase annually after 2027 based on cost-of-living adjustments.
• Restrictions: Nonresident aliens are ineligible; no double benefit allowed (interest used for the credit cannot also be deducted or credited elsewhere).
• Effective Date: Applies to taxable years beginning after December 31, 2026.

Significant Changes to Existing Law

• Adds a new non-refundable credit for mortgage interest, separate from the existing itemized deduction for qualified residence interest under Section 163(h).
• Introduces income thresholds and caps not present in the prior deduction rules, while prohibiting simultaneous use of the credit and deduction for the same interest.
• Requires regulatory guidance from the Secretary of the Treasury to implement the credit.

Potential Impacts

• On Citizens: Provides tax relief to homeowners with qualifying mortgages, potentially reducing tax liability by up to $2,000 annually, though subject to income limits and caps.
• On Government Agencies: The Internal Revenue Service would administer the credit, including allocation rules and verification of interest payments, leading to increased processing and compliance efforts.
• On International Relations: No direct effects, as the credit is limited to U.S. taxpayers and excludes nonresident aliens.

Main Stakeholders Affected

• Homeowners with mortgages on their principal residences.
• Taxpayers across various filing statuses, particularly those with modified adjusted gross incomes below the phase-out thresholds.
• The Internal Revenue Service, responsible for enforcement and guidance.
• Mortgage lenders and financial institutions, due to potential changes in taxpayer behavior regarding interest reporting.

Notable Legal, Constitutional, or Political Implications

• Operates under Congress's authority to enact tax legislation, with no apparent constitutional conflicts.
• The phase-out mechanism and income limits may raise questions about equitable treatment across income levels.
• The denial of double benefits ensures the credit functions as an alternative to the existing deduction rather than an addition.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Latimer, George [D-NY-16]

Recent Actions

• 2026-06-30: Referred to the House Committee on Ways and Means.
• 2026-06-30: Introduced in House
• 2026-06-30: Introduced in House

Bill Versions

• Home Mortgage Interest Credit Act of 2026 — issued 2026-06-30 — PDF (6 pages)